SPRINGFIELD - State payments to its pension systems will increase by only $100 million in the next budget, according to a report issued by the state's pension actuary Tuesday.

The increase is substantially smaller than in the previous two years when the state was required to add about $1 billion each year to its pension payments to meet funding requirements.

The report, issued through Auditor General William Holland's office, said the state will be required to pay about $6.85 billion in next year's budget to meet its pension obligations. In the current state budget, lawmakers had to allocate $6.75 billion to payments for the five state-funded pension systems.

Although the state will be paying $100 million more next year, that is the smallest increase in pension payments for several years. In the current budget, lawmakers had to allocate about $1 billion more to pension payments. The year before that, the increase was over $900 million.

The contribution amounts do not reflect any of the pension reforms passed by the General Assembly in December. The calculations were made before the bill was passed. Also, the law is being challenged in court.

Gov. Pat Quinn's budget office declined to comment on the numbers.

The largest of the state retirement systems is the Teachers Retirement System which covers pensions for downstate teachers. Just about half the state pension contribution goes to TRS.

The state contribution to TRS is projected to drop slightly next year, going from $3.438 billion this year to $3.413 billion next year. TRS spokesman Dave Urbanek said a number of factors were responsible, including better than expected investment results, teacher salary increases that were lower than projected and the effects of pension changes enacted a couple of years ago for newly hired teachers.

Despite this, the state's actuary suggested that state contributions should be higher. The actuary, Cheiron, said the three biggest pension systems covering downstate teachers, state employees and university workers are overly optimistic in estimating the money they will make from investments. All pension systems get their money from employee contributions, employer contributions and investments.

Cheiron said it was concerned about the systems' solvency in the event of another major downturn in the market. It suggested the systems be more conservative in estimating the rate of return they'll get from investments.

"Anytime that you lower the assumed rate of return, you are automatically increasing the state's contribution," Urbanek said.

TRS already cut its estimate for investment income in 2012 and will review it again in 2015. Still, Urbanek said, TRS got a higher return than it estimated.

"The rate of return is always going to be a volatile issue," he said. "It is always something we are cognizant of."